Lateral subsurface flow (LSF) is a phenomenon frequently occurring in the field induced by local water saturation along horizon boundaries under nonequilibrium conditions. However, observations of LSF in undisturbed soils under controlled irrigation in the laboratory are limited but needed for model improvement, prediction, and quantification of LSF. We present a method for extracting an undisturbed soil monolith along a soil horizon boundary and introduce an experimental setup for the measurement of LSF and an irrigation device for simulating rainfall. An experimental test run was simulated using HYDRUS 2D. Water infiltrating into the monolith and flowing either laterally along the horizon boundary or vertically through the bottom horizon could be separately captured by suction discs at the side and the bottom. Thus, a clear distinction between lateral and vertical flow was possible. Pressure heads and water contents were recorded by tensiometers and frequency domain reflectometry (FDR) sensors distributed across the monolith in a regular two-dimensional, vertical, cross-sectional pattern. Sensor readings indicated the presence of nonequilibrium conditions within the monolith. Modeling results could reproduce the lateral and vertical outflow of the monolith under constant irrigation, thus showing that water flow within the monolith under steady-state conditions can be explained by the Richards equation and the van Genuchten–Mualem model. The presented method can be used to improve and verify models designed for the prediction of the onset of LSF including that induced by local nonequilibrium conditions.